When you enter into a contract, you acknowledge that you have certain rights and responsibilities. And you know that there are consequences if you or the other party fails to live up to those contractual duties. But what happens when a third party interferes with that contractual relationship? What if this interference causes a breach in or termination of your contract?
In this situation, you may have a claim for intentional or tortious interference with contractual relations. This type of claim requires an injured party to show the following five things:
· A contract existed between the injured party and another.
· The third party knew about the contract.
· The third party intentionally interfered with the injured party’s contractual relationship, which caused a breach or termination of that relationship.
· The third party’s behavior was improper; in other words, liability must be based on more than the act of interference alone.
· The injured party suffered harm and damages due to the contract breach or termination.
The intentional interference with contractual relations can arise in many circumstances, all of which can result in serious damages and irreparable harm to a company’s operations or reputation. For example, a third party might improperly solicit a customer from a competitor, defame or slander a company with the intent to draw business away from it, or cause an employee or former employee to breach a non-compete provision in an employment contract. While healthy competition is part of our country’s free market tradition, there is a line that businesses or individuals should not cross in attempting to gain new business or customers. What starts as an aggressive marketing strategy can turn into a prohibited activity that seriously harms another business.
If you have questions about intentional interference with contractual relations or your rights and responsibilities with a business contract, you will greatly benefit from calling us today and getting the advice that you need. Williams Mestaz, L.L.P., has the experience and knowledge to handle your case the right way. Contact Williams Mestaz, L.L.P., today at (602) 256-9400.